EU Parliament’s Largest Bloc Prepares CO2-Fix Backup Plan

April 9 (Bloomberg) -- The European Parliament’s largest
political party is preparing a backup plan in case it fails to
block a European Commission proposal to fix the carbon market,
according to two party officials.

The European People’s Party will decide tomorrow on the
final wording of the amendment, which is intended to restrict
the commission’s plan, and will agree a voting strategy on the
carbon fix April 15, the officials said after a meeting of the
party’s working group on the environment in Brussels today.

The EPP’s fall-back plan would be put to a vote if its
amendment to reject the rescue plan outright is shot down by
Parliament, the officials said on condition of anonymity because
the talks were private. The full Parliament is scheduled to vote
on April 16 on a draft emissions trading law change that would
enable delaying auctions of some carbon permits, according to
the assembly’s preliminary agenda.

The commission’s proposal to help prices in the carbon
market rebound from record lows has divided policy makers and
industry. The emergency strategy to temporarily curb oversupply,
known as backloading, needs support from EU governments and from
the Parliament if it is to be implemented.

EPP lead lawmaker on the measure Eija-Riitta Korhola said
earlier today that the “vast majority” of the group’s
lawmakers oppose the commission’s plan. Carbon prices slumped as
much as 10.4 percent to 4.66 euros following her comments and
were at 4.80 euros on the ICE Futures Europe exchange as of 4:45
p.m. in London.

Voting Strategy

The party, which controls just over one-third of the
Parliament’s 754 seats, will decide on the voting strategy
related to its two amendments one day before the assembly as a
whole votes on the commission’s plan. The plenary makes such
decisions by a simple majority.

The EPP will need to agree on whether to support the market
rescue strategy if both the proposal to reject the commission’s
plan and the fall-back amendment fail, the officials said. The
group’s members voted 15 to 7 against a report supporting the
commission’s plan in the Parliament’s environment committee in
February. Two EPP members abstained.

While the committee backed the report by 38 to 25 votes,
with two abstentions, it stopped short of mandating Matthias
Groote, a Social Democrat member of the Parliament, to start
talks with national governments on the final wording of the
draft measure. The decision was transferred to the plenary,
which will decide on the future of the proposal next week in
Strasbourg, France. Members of the EPP are not obliged to vote
in line with the party position though detractors face some
punishment.